Technological change and domestic outsourcing

Antonin Bergeaud, Clément Malgouyres (), Clément Mazet-Sonilhac () and Sara Signorelli
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Antonin Bergeaud: HEC Paris - Ecole des Hautes Etudes Commerciales
Clément Malgouyres: CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique, IPP - Institut des politiques publiques, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
Clément Mazet-Sonilhac: Bocconi University [Milan, Italy], CdF (institution) - Collège de France
Sara Signorelli: X - École polytechnique - IP Paris - Institut Polytechnique de Paris

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Abstract: Does domestic outsourcing react to technological change? We study the staggered diffusion of broadband internet in France in the 2000s and show that connected firms increased their outsourcing expenditures while decreasing the diversity of occupations they employ in-house. Meanwhile, employment in noncore occupations became increasingly concentrated in firms specializing in subcontracting services. Finally, we provide evidence that workers in high-skill occupations experienced salary gains from being outsourced, while workers in low-skill occupations lost out. Overall, we show that the deployment of new technologies stimulated domestic outsourcing in this context, with important implications for labor market inequality.

Date: 2026-10
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Published in Journal of Labor Economics, 2026, 43 (4), pp.1135-1168. ⟨10.1086/730166⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-05840911

DOI: 10.1086/730166

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